• Tai hears dairy trade priorities

• Suez Canal blockage

• Dairy ingredient workshops kick off in Mexico

• REGISTER: Seeing the future at spring membership meeting

• Market Summary: China imports soar

• FEEDBACK NEEDED: Indonesian Halal regs

• UK extends EU health certificate acceptance

• Addressing trade issues with Mexico

• New Net Zero partnership focuses on feed

• Info for customers: U.S. dairy protein for personalized nutrition

• Lactalis seeks Bel assets

USDEC stresses dairy trade priorities to new USTR
USDEC and NMPF sent a joint letter and accompanying memo to new USTR Katherine Tai this week congratulating the ambassador on her confirmation and highlighting the importance of trade to the economic health of the U.S. dairy industry—from the 32,000 American dairy farmers to the 3 million American workers supported by the sector.

The letter and memo outline several specific U.S. dairy issues that will require Tai’s “clear-sighted leadership” to resolve, including:

• Enforcing USMCA.
• Concluding new trade agreements that expand U.S. dairy export markets, including ongoing negotiations with the UK and Kenya and new talks with high-potential markets like Vietnam, Indonesia and the Philippines.
• Restoring export growth in China.
• Tackling non-tariff barriers to U.S. dairy exports.
• Establishing clear protections for common food names to combat the misuse of geographical indications.
• Fostering science-based guidelines in multilateral organizations.

“Our industry faces mounting barriers to exports, which is why we want to ensure Ambassador Tai’s full awareness of our challenges globally,” said USDEC President and CEO Krysta Harden in a press release on the letter.

“Opening new markets and growing our dairy exports requires constant and fair trade rules to level the playing field that our farmers and dairy manufacturers in all 50 U.S. states face around the world,” the letter states.

CCFN letter reiterates common name concerns
The Consortium for Common Food Names (CCFN) sent a separate letter to Ambassador Tai on behalf of nine U.S. agricultural groups, including USDEC, zeroing in on the common names issue. (CCFN was founded and is staffed by USDEC.)

The letter asks Tai to “forge a new path forward in the effort to preserve the use of common food and beverage terms on American-made products by securing concrete and effective protections for key terms with important trading partners.”

It cites strong bipartisan requests from the House and Senate last year for the U.S. government to secure specific market access assurances for certain common food and beverage terms.

The Biden Administration’s “Build Back Better” plan “means building better trade policy as well,” said Jaime Castaneda, CCFN executive director and USDEC senior vice president. “We look forward to working closely with Ambassador Tai and her team to translate that exhortation into real world commitments that show that USTR has the backs of American farmers and food workers making these products.”

Both letters were cc'd to USDA Secretary Tom Vilsack.

Suez accident further complicates shipping
At press time, authorities were still working to clear a vessel that ran aground in the Suez Canal blocking all traffic. Initial attempts to refloat the Ever Given—a 1,300-ft., 20,000-TEU cargo ship—were only partially successful and failed to reopen the vital shipping lane.

As of Thursday, media outlets were reporting a backlog of 180-plus ships waiting to traverse the waterway, with others lining up behind them. Smaller ships are being diverted to an older channel, but expectations for a quick fix to the main canal were fading fast by mid-Thursday.

The blockage comes at a bad time, given ongoing shipping challenges facing international trade and agricultural exporters in particular.

Hopes for weekend progress
The best chance to refloat the ship will come on Sunday or Monday when tides reach their peak. The Loadstar reported that specialists were being flown in from Japan and the Netherlands to consult.

If freeing the vessel requires lightening its load, the process could take several weeks. Some carriers were reportedly considering rerouting product around the Cape of Good Hope, a detour that would add two weeks to shipping times.

Europe-Asia trade will be hit the hardest by the accident, but the fallout will stress already tightly wound global shipping and could heighten container and equipment shortages and shipping delays around the world. (The Loadstar, 3/25/21; Wall Street Journal, 3/25/21; Bloomberg, 3/24/21; ING, /24/21)

 

2021 U.S. dairy ingredients workshops kick off in Mexico
The first three of an expected 27 USDEC Mexico/Central America ingredient workshops took place this week at the INCALEC Institute of Meat and Milk in Aguascalientes, Mexico. The workshops were held in-person as part of INCALEC’s 11^th annual Expo Lactea, a dairy trade event featuring exhibitors, seminars, workshops, one-on-one meetings and other activities related to dairy farming, dairy processing, dairy technology and equipment.

As with the successful October-November 2020 USDEC ingredient workshop series in Mexico, the three events held this week focused on the benefits of using U.S. dairy ingredients in fresh and semi-hard cheeses unique to Mexico, like queso panela, queso oaxaca and queso blanco. About 75 representatives of mid-size Mexican cheese manufacturers participated in the first two workshops March 24 and 25, and 35 more were expected at today’s session.

Open opportunities
Rodrigo Fernandez of the USDEC Mexico office moderated the workshops and presented the U.S. dairy story. Well-known industry and technical experts Jaime Valencia, consultant to the Mexican dairy industry, and Marco Delgado, general director of INCALEC, led classroom and hands-on pilot plant sessions using U.S. dairy ingredients to make the various cheeses.

“Dairy ingredients offer yield, functionality and economic advantages for these cheesemakers, and the real beauty of this sector is that, for the most part, they don’t currently use dairy ingredients,” said Terri Rexroat, vice president, ingredients marketing. “So U.S. Dairy has the wide open opportunity to establish a new market sector for U.S. ingredients.”

More to come
In addition to more ingredient workshops for cheesemakers, additional sessions this year will focus on U.S. dairy ingredients in the bakery sector. The workshops are slated for Mexico as well as Central America.

Most of the workshops will be live streamed and members are welcome to view, but please be aware that events are in Spanish. For more information, please contact Keith Meyer at kmeyer@usdec.org.

Spring membership meeting will help you think like a futurist
The success or failure of a business often comes down to a company’s ability to manage uncertainty and effectively identify how external—and seemingly unrelated—trends could significantly impact that business. Success may not require seeing the future, but picking up the signs and accurately interpreting them certainly does help.

Sheryl Connelly, manager of global trends and futuring at Ford Motor Co. since 2004, will reveal her secrets for thinking like a futurist at USDEC’s upcoming Spring Membership meeting. Don’t miss Connelly share her strategies and insights for effectively anticipating change in a way that allows you to thrive, innovate and remain relevant.

USDEC invites you not only to register now for the Spring Membership Meeting but also invite a colleague. The meeting is taking place virtually again this year over the course of four days from April 19-22. Download the preliminary agenda to see the complete list of sessions and speakers so far.

Watch your email inboxes and Global Dairy eBrief for more on the membership meeting and individual sessions in the coming weeks. For questions, please contact Luke Waring at lwaring@usdec.org or Weston Abels at wabels@usdec.org.

Membership renewal deadline March 31
The USDEC membership renewal deadline is March 31, 2021. Please send your renewal today to avoid losing access to the members-only portions of the USDEC website (including the USDEC Export Guide), the members-only Global Dairy eBrief newsletter and other member benefits. If you have questions about renewal, please contact Luke Waring at lwaring@usdec.org.

China posts record dairy imports in January
Recent Global Dairy Trade (GDT) auctions and pricing trends point to ongoing heavy Chinese demand. January-February Chinese import data (from all suppliers, not just the United States) reaffirms it. Buoyed by a huge January, China imported record volumes of WMP, SMP, whey, cheese and fluid milk and cream in the first the two months of 2021.

WMP demand jumped 39% in January vs. the same period the previous year Volume was 189,848 MT, a single-month record for China.

SMP rose 49%, whey soared 81% and milk and cream increased 72% in January. Cheese imports grew “only” 20% in January to nearly 20,000 MT .

In February, SMP (+15%), whey (+24%), cheese (+64%) and fluid milk and cream (+35%) continued the gains.

GDT results suggest we will see further growth in March-April volumes, although a portion of January’s lights-out import numbers likely came from frontloading purchases to ensure supply in the face of ongoing shipping uncertainty.

NZ milk output exceeds expectations
New Zealand milk production grew 6.7% in February (adjusting for Leap Day), significantly exceeding expectations. One of the storylines driving Global Dairy Trade price gains this year has been uncertainty about the strength of New Zealand milk output, based in part on reports of dry weather and inconsistent pasture growth.

Even though it is the back shoulder of the 2020/21 season, the size of the February increase will be a bearish factor heading into the next auction on April 6 and suggests New Zealand farmers are positioning well for a strong 2021/22 season.

EU dairy production, exports start the year slowly
The EU-27+UK started 2021 slowly, with January milk production down by about 1% year over year, January third-country export volume down across all major product categories except whey and fluid milk and cream, and dairy product output down across all major categories except WMP and drinking milk (which was essentially flat).

From a milk production standpoint, the bloc’s top three milk producers—Germany, France and the Netherlands—saw milk deliveries fall 1.7%, 3.3% and 1.3%, respectively. It was Germany’s sixth straight monthly drop and heightens questions about the impending EU flush.

In exports, apart from a 22% increase in whey shipments, most products posted declining year-over-year volumes in January. Cheese shipments fell 9% (with sharp declines to the United States and South Korea), butter volume dropped 24%, AMF declined 45%, and WMP dipped 2%.

EU SMP exports increased 1% in January (compared to the previous year), with gains to Southeast Asia offsetting declines to the Middle East and Nigeria.

Download USDEC pricing app
Price trends are always at your fingertips. All you need to do is download the USDEC Commodity Prices Finder app, a mobile resource for tracking a variety of USDA dairy commodity prices. It is available at the Apple Store for iOS devices and Google Play for Android.

If line is trending up, currency is strengthening vs. U.S. dollar (U.S. dollar is weakening). This is favorable for U.S. competitiveness. If line is trending down, currency is weakening vs. U.S. dollar (U.S. dollar is strengthening). This is unfavorable for U.S. competitiveness. Currency exchange rates are calculated for Wednesday of each week. Source: Oanda.com.

USDEC seeks member feedback on Indonesia Halal regulation by March 29
The Market Access and Regulatory Affairs team issued a Member Alert last week noting that Indonesia’s new Halal implementing regulation includes several requirements that may be challenging for U.S. processors. Although the regulation was finalized, Indonesia has notified the text to the WTO, and USDEC will be submitting feedback on its expected impact to the U.S. government. USDEC requests member feedback on several aspects of the regulation by Monday, March 29. Contact Sandra Benson at sbenson@usdec.org with questions or comments.

UK extends EU health certificate acceptance date
The UK has notified AMS that it has extended its transitional period for accepting EU health certificates from March 31, 2021, to June 30, 2021. The transition to new health certificates for the UK will now occur on July 1, 2021.

AMS Dairy Grading has also reconfirmed that UK authorities will continue accepting EU health certificates if they were issued no later than June 30. As such, U.S. shipments accompanied by an EU certificate, that was issued no later than June 30, arriving in the UK will be accepted, even if the shipment arrives after June 30, 2021.

If you have any questions, please see the current UK document in Volume 2 of the USDEC Export Guide or contact Bryan Jacoby at bjacoby@usdec.org.

Letter calls on U.S. to address rising agricultural trade issues with Mexico
USDEC and NMPF co-signed a letter with 25 other U.S. ag organizations outlining concerns over the deteriorating U.S. agricultural trade relationship with Mexico. The letter, sent to USDA Secretary Tom Vilsack and USTR Katherine Tai, summarizes numerous recent moves by Mexico that are not only hampering current U.S. food and agriculture export efforts but also hold the prospect for additional trade barriers to come.

USDEC outlined key dairy issues for the letter, including Mexico’s mandatory Conformity Assessment Procedure for its cheese standard of identity, shifts in customs enforcement related to minor paperwork compliance or interpretation matters, growing restrictions on the use of common cheese names, repeated policy proposals aimed at curtailing dairy imports, and front-of-pack labeling regulations.

“The food and agriculture trade relationship with Mexico has declined markedly, a trend USMCA’s implementation has not reversed,” the letter notes. “We are eager to work with you to address challenges in the Mexico trade relationship, which is critical to U.S. farmers, ranchers, producers and workers.”

 

New partnership focuses on feed opportunities to advance Net Zero Initiative
USDEC President and CEO Krysta Harden officially unveiled a new sustainability partnership between the Innovation Center for U.S. Dairy, Syngenta and The Nature Conservancy at this week’s Agri-Pulse Ag and Food Policy Summit.

The partnership will focus on dairy farm feed practices, seeking to develop a replicable program and toolset to scale the adoption of best management practices in feed/forage production and feed efficiency. The plan is to launch in one or two states later this year, with a goal of scaling and expanding to other geographies across the U.S. over the next three years.

Part of NZI
The partnership is part of the Net Zero Initiative (NZI), a critical component of U.S. dairy’s environmental stewardship goals, endorsed by dairy industry leaders and farmers, to achieve carbon neutrality, optimized water usage and improved water quality by 2050.

The partnership fits the overall goals of the NZI and responds to manufacturer, retailer and consumer demands in the U.S. and around the world.

“The questions that come up now, more and more all the time, are about our footprint … our commitment to sustainability,” said Harden. “Customers are asking those questions about the U.S. milk supply.”

U.S. export need
Being able to demonstrate U.S. dairy sustainability progress is an increasingly important part of U.S. competitiveness in global markets.

“We want to be that supplier of choice around the globe. We know that we can compete at that level, but we're going to have to be ready to answer the sustainability questions,” said Harden. “This kind of work gives us a way to define ourselves as the U.S. dairy industry. It lets us say what is important to us and our dairy farmers instead of someone else doing it for us.”

For more on the new partnership between the Innovation Center, Syngenta and The Nature Conservancy, watch the Agri-Pulse panel discussion on the subject.

U.S. dairy protein resource for your customers
USDEC’s Ingredients team posted a new Dairy Spotlight article highlighting how U.S. dairy proteins fit rising consumer demands for personalized nutrition options. “Dairy Proteins Fuel Personalized Health and Wellness Innovation Opportunities” explains U.S. dairy protein’s role in meeting the nutritional needs for aging populations, for muscle health, for insulin-sensitive individuals, and for people forced to restrict levels of physical activity due to health issues. The article contains numerous links to research papers that support dairy protein’s beneficial health outcomes. If you want your customers to learn more about U.S. dairy protein and health and wellness, direct them to Dairy Spotlight.

Lactalis looks to buy Bel Group cheese assets
Lactalis is negotiating with fellow French cheesemaker Bel Group to buy numerous Bel businesses, including Royal Bel Leerdammer NL (including the Leerdammer brand), Bel Italia, Bel Deutschland, and Bel Shostka Ukraine, in exchange for Lactalis’s 23% stake in Bel (Lactalis would maintain a 1% share after the acquisitions).

The sale aligns with Bel’s strategy to expand beyond cheese and grow its presence in the healthy snack sector. The company said that the additional funds from the deal would allow it to ramp up diversification efforts in high-growth markets like Asia/Pacific and North America. The deal would raise Lactalis’s presence in the Netherlands, Italy, Germany and Ukraine.

Nurishh rollout
Separately, and also in line with its diversification strategy, Bel launched its first 100% plant-based cheese alternative line under the Nurishh banner. The line—which offers alternatives to cheddar, mozzarella and provolone in slices and shreds—will debut in the U.S. with a global rollout to follow. (Company reports; Food Dive, 3/23/21; FoodBev.com, 3/19/21)

Westland to double butter output
New Zealand’s Westland Milk Products is spending NZ$40 million (about US$28 million) to double butter capacity at its Hokitika, South Island, manufacturing plant. The project will focus on its Westgold brand of grass-fed, consumer butter as part of the company’s strategy to move away from commodity packaged products. When completed, the facility will manufacture 42,000 MT of butter per year. (Company reports)

Mergers, acquisitions and joint ventures
General Mills confirmed reports that it was selling its 51% stake in Yoplait’s European operations to France’s Sodiaal. What had not been reported earlier was the asking price: General Mills, in return, will acquire Sodiaal’s 48% stake in the Canadian Yoplait business. Yoplait Canada will become a wholly-owned subsidiary of General Mills . . . Reckitt Benckiser Group is considering selling its Mead Johnson infant formula business in China . . . Singapore’s Olam International sold its 15% stake in New Zealand’s Open Country Dairy. The buyer or buyers were not named . . . Saudi dairy and food giant Almarai purchased Bakemart Bahrain and Bakemart UAE (including two UAE production facilities) in a deal worth $26 million. Bakemart produces baked goods for the foodservice and retail sectors in the Middle East . . . Mondelez International purchased a “significant majority interest” in UK sports nutrition brand Grenade. (USDEC Middle East/North Africa office; FoodBev.com, 3/23/21; BusinessDesk, 3/23/21; Food Dive, 3/22/21; Reuters, 3/22/21)

• USDEC sends farmers a heartfelt thanks on National Ag Day
• USDEC salutes U.S. dairy industry for high-quality products exported around the world
• Dairy farmers give us nutritious foods while caring for the environment (retweet)
• U.S. dairy proteins are an ideal ingredient solution for global consumers (retweet)